State audit slams Willis Center for questionable expenses

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Jan 4, 2014 at 6:00 AMJan 4, 2014 at 2:45 PM

By Thomas Caywood TELEGRAM & GAZETTE STAFF

WORCESTER — During the years it limped along one step ahead of insolvency, often paying only its most pressing bills and leaving others to rack up thousands of dollars in late fees and interest, the Henry Lee Willis Center nonetheless found $799 a month to lease an Audi for its executive director, Carlton A. Watson.

In a preliminary divorce agreement filed in May 2012, Mr. Watson assigned use of the German luxury vehicle to his estranged wife, Shelly L. Watson, also an employee of the Willis Center at the time.

The $57,000 the nonprofit Worcester social service agency paid to lease the SUV for more than six years, an expense it then charged to its state contracts, was one of several instances of improper or questionable spending of public money highlighted in a state audit released in late December.

"It was not fiscally prudent for the center to use its limited funds in this manner given its poor financial condition," the audit, which covered July 1, 2010, to Feb. 15, 2013, stated.

State Auditor Suzanne M. Bump's office also faulted the now-defunct Willis Center for nearly $40,000 in payments to an affiliated for-profit management company, $28,700 in late fees and interest resulting from poor management, and $10,000 to hire a Boston public relations firm after the state abruptly withdrew funding from the center amid vague accusations of questionable spending.

A spot check of three months' worth of the center's credit card bills found $8,200 worth of charges that were notproperly documented, according to Ms. Bump's office.

The audit report is the first significant public accounting of the kinds of problematic financial practices that prompted four agencies to pull all funding from the Willis center in February 2013, essentially unplugging the financially ailing nonprofit from life support.

The audit, prompted by concerns initially raised by the state Department of Housing and Community Development, criticizes the Willis Center for higher-than-normal administrative expenses and years of bad financial management, during which time losses mounted unchecked and the center racked up a nearly $1 million deficit.

Many of its employees complained that they had not been paid in weeks when the agency, founded in 1991, closed.

The Willis Center shut down operations in February, shortly after the state housing department and three other state agencies canceled social service contracts with the center.

Mr. Watson and the Willis Center's former chairman, Henry O. Ritter, did not return calls seeking comment on the state audit's findings.

After closing the Willis Center, Mr. Watson formed consulting firm Business Organizational Resources Associates LLC, which is based out of a home on North Parkway in Worcester, according to records on file with the state.

At the time the state canceled its contracts with the Willis Center, William S. Coleman III was one of a number of people in the city who called unsuccessfully for an explanation from state officials about why such drastic action was warranted.

Having now seen the results of the state audit, Mr. Coleman said the people of Worcester would have been better served if the Willis Center and other nonprofits getting public money had been audited in such a thorough way all along, not just after years of apparent mismanagement.

"This is public money. How come there weren't audits all along? How come somebody didn't throw up a red flag before it got that bad?" Mr. Coleman said. "These programs they were providing were vital services. It hurt the community."

The Willis Center's housing and other social service state contracts eventually were transferred to other nonprofits, and the center's properties were sold for $2.5 million, the majority of which went to pay off the outstanding mortgages. The $300,000 the center cleared from the real estate sale wasn't enough to satisfy roughly $1 million in debts, including $533,457 still owed to the state.

Aaron Nicodemus of the Telegram & Gazette staff contributed to this report. Thomas Caywood can be reached at thomas.caywood@telegram.com.

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